If you want to add one in the Description section of an event, on the Add Event page, toward the right end of the second row of icons below 'Description:', is one that lets you add an image from a file.

If you want the image to show in the Pop Up, then at the bottom of that page, is a row 'Add an image to this event'. If you don't like any of the ones that come with Localendar, you can click the bar to the lower left, and upload your own.

If you want a wallpaper background to a calendar that you are embeding on your website, then go to the Options page, Color tab, click on 'Month-View Background' and set it to transparent.

I think all of these are explained to some extent in the Help section.